Judge finds Rambus destroyed evidence

SAN FRANCISCO—A U.S. federal judge ruled that semiconductor intellectual property licensor Rambus Inc. improperly destroyed documents relevant to a patent infringement lawsuit brought by memory chip vendor SK Hynix Inc., a finding that is expected to limit the damages Rambus can collect in the case.

According to SK Hynix—formerly Hynix Semiconductor Inc.—U.S. District Court Judge Ronald Whyte's ruling that Rambus engaged in "massive destruction of records" on three "shred days" will "substantially limit" royalties on Rambus's patents. [Get a 10% discount on ARM TechCon 2012 conference passes by using promo code EDIT. Click here to learn about the show and register.]

Rambus (Sunnyvale, Calif.) said the judge also ruled that the Rambus patents involved in the case are valid and infringed by SK Hynix. The ruling means that Rambus is entitled to receive royalty payments for past infringement, Rambus said.

The amount that SK Hynix will be ordered to pay Rambus has not yet been decided. Rambus said the parties have been ordered to provide briefs on the issue of the damages next month.

"There is now no question whether Hynix owes us money for the wrong standing infringements of our patents," said Thomas Lavelle, senior vice president and general counsel at Rambus. "The only remaining question is how much."

In his ruling, Whyte found that Rambus executed its document retention practices during a time when it reasonably anticipated litigation, and thus willfully spoliated evidence, Rambus said. But Whyte also found that Rambus did not deliberately destroy documents it knew to be damaging, Rambus said.

"While we are disappointed with the fining of spoliation, we feel that this is a positive result as it clearly states there is value in our technology and we have a right to collect royalties for the use of our patented inventions," Lavelle said.

A jury previously found that SK Hynix should pay Rambus damages of $397 million in the case, which stems from a suit originally brought by Hynix against Rambus in 2000. But an appellate court vacated that decision in 2011, remanding the matter back to the U.S. District Court in Northern California for reconsideration. Whyte found that SK Hynix may have been prejudiced by the alleged spoliation, and thus imposed a sanction on Rambus, limiting royalties to those which are reasonable and non-discriminatory, according to Rambus. Related stories:

the state of the law is that corporations are impersonal entities with all the privileges of people, but no expectation of "civility". we tell them they can do whatever they can get away with, and we'll only judge them by stock price and dividends. it's all our fault, and not surprising that the IP protection racket is profoundly damaging to society.